Tax Law Updates

OBBBA expands disaster loss relief so taxpayers can deduct more losses from federally declared disasters between 2020–2025 without the 10% AGI floor, even if using the standard deduction. Starting in 2026, similar relief applies to certain state-declared disasters with governor and Treasury approval.

The OBBBA creates a new “Trump account,” an IRA-like plan for children under 18, funded by a $1,000 seed contribution, up to $5,000 annual after-tax contributions (plus rollovers and employer funding), with withdrawals taxed like IRAs but treated separately from other IRA limits.

OBBBA expands §529 plans to cover more K–12 expenses (books, tutoring, tests, therapies, etc.) and raises the annual tax-free withdrawal limit for K–12 costs from $10,000 to $20,000 per beneficiary starting in 2026. It also allows tax-free withdrawals for postsecondary credentialing expenses, including tuition, exam fees, continuing education, and industry-recognized licenses or certificates

The TCJA’s $10,000 SALT deduction limit is made permanent, but for tax years 2025 through 2029, the limit is temporarily increased.